Once you cross £100,000, HMRC starts clawing back your personal allowance at £1 for every £2 you earn. The common name is the 60% tax trap because the taper adds a 20p income-tax effect on top of 40% higher-rate tax. In standard employee examples, 2% National Insurance means the total marginal deduction can be about 62%.
Salary
£110,000
Above £100k
£10,000
You keep only about £3,800 of the extra £10,000
The escape
If you sacrifice £10,000, your take-home falls by about £3,800, but the full £10,000 goes into your pension. The £6,200 tax, NI and allowance-taper cost is avoided under these assumptions.
Salary
£120,000
Above £100k
£20,000
You keep only about £7,600 of the extra £20,000
The escape
If you sacrifice £20,000, your take-home falls by about £7,600, but the full £20,000 goes into your pension. The £12,400 tax, NI and allowance-taper cost is avoided under these assumptions.
Salary
£125,140
Above £100k
£25,140
You keep only about £9,553 of the extra £25,140
The escape
If you sacrifice £25,140, your take-home falls by about £9,553, but the full £25,140 goes into your pension. The £15,587 tax, NI and allowance-taper cost is avoided under these assumptions.
Numbers come from the Afterax tax engine for 2026/27 in England, Wales and Northern Ireland. Scotland has the same trap mechanic on a different higher-rate band.
Your escape
Drag the salary slider. Everything below recomputes in your browser against HMRC's 2026/27 rates, and shows you the exact salary-sacrifice contribution that drops your adjusted net income back down to £100,000.
You keep only
£7,600
Of the £20,000 earned above £100k
Effective cost
62.0%
Tax, NI and lost personal allowance combined
Pension pot if you escape
£20,000
Take-home reduction: about £7,600
Next useful routes
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For most people, UK income tax has three rates. 20% on income up to £50,270, 40% on anything between there and £125,140, then 45% above that. What nobody tells you is that a fourth rate hides between £100,000 and £125,140.
The £12,570 personal allowance is normally tax-free. Cross £100,000 and it starts shrinking by £1 for every £2 you earn over the threshold. By £125,140 it's gone entirely. The cruel bit is that the allowance you lose then gets taxed at 40%, on top of the 40% you already owe on the pound that triggered the loss. The income-tax effect comes out at 60%; for many employees the example total is about 62% once 2% employee NI is included.
Pension salary sacrifice is often the most direct payroll route because it reduces gross pay before tax and employee NI, if your employer offers it. Personal pension contributions, Gift Aid, and some other reliefs can also reduce adjusted net income, but they work differently. Salary sacrifice depends on employer scheme rules, can affect payslip salary, mortgage affordability, statutory pay and some benefits, and must not reduce cash earnings below National Minimum Wage. Complex cases need professional advice.
The long version of this story, including the employer NI angle and the cliff effects on childcare allowances, lives in the full guide. Want to see the difference two pension contribution levels make? Open /compare and slide between them. For the wider threshold picture, use the adjusted net income calculator or the high-earner tax route guide.
Sources & last reviewed
Updated for 2026/27 · last reviewed 29 April 2026 · view changelog →
Bands, thresholds and reliefs on this page come directly from the following official sources. Tax rates are checked against these references whenever a Budget or in-year change is announced.